Italy’s short-term economic outlook is firm. Yet the country’s long-term growth outlook is weak. The next government is unlikely to tackle large challenges. On the upside, the risk of an unexperienced populist government after the 2018 elections is limited.

Economic growth in the Eurozone exceeded expectations in the third quarter of 2017. Growth is heading for 2.3 percent in 2017. Still, in the short term, core inflation is unlikely to reach the levels the ECB would deem 'durable and self-sustaining'.

Global economic growth accelerates this and next year. Though for many central banks their inflation target remains out of reach. As such, monetary policy normalisation is not yet on the cards, while it is needed to structurally lift economic growth.

We expect moderate global economic growth of around 3 per cent in 2017 and 2018. American protectionism will expectedly have a negative effect on world trade growth. Political developments in the US and Europe constitute the biggest source of uncertainty.

As of January 20, Donald J. Trump is President of the United States. In this Special we sketch the changes in economic policy that we should expect in the coming years, in particular in the areas of fiscal stimulus, trade policy, and energy policy. We also look at effects on US public debt sustainability, and market implications.